The Impact of the Arbitration Agreement in Resolving Disputes Related to Bank Guarantees

Abstract

In response to the research problem and its hypotheses and to achieve its objectives, the research includes an introduction which explains the research problem, its methodology, objectives, and the reasons for selecting the topic. Other than the introduction, the research is divided into three sections. The first section is about the discussion of arbitration agreement in terms of its nature. In the first part of this section, the researcher discusses the definition of arbitration agreement and its nature, while the second part is devoted to the advantages and disadvantages of arbitration agreement. The second section is about the impact of arbitration agreement on the letter of bank guarantee. The first part of this section examines the effect of arbitration agreement included in the basic contract between the bank’s ordering customer, who issues the letter of guarantee, and the beneficiary of the letter. The second part discusses that the arbitration agreement included in the guarantee contract between the bank and its ordering customer has no impact on the ordering customer’s relationship with the beneficiary or the relationship of the beneficiary with the bank. The third section is devoted to the effect of arbitration agreement on the documentary credit. In the first part of this section, the researcher discusses arbitration agreement included in the basic contract that links the ordering customer and the statement of the beneficiary of the letter of credit. In the second part of this section, the researcher examines arbitration agreement included in the letter of credit between the bank and the customer. The research is concluded with a general conclusion that includes some of the most important findings and recommendations.